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Business analysis > Strategy Analysis - Ch. 3 > Flashcards

Strategy Analysis - Ch. 3 Flashcards

1
Q

What is the general worldview, or changes we have seen, in a strategic sense

A
  • business is increasingly unpredicable and changes more turbulent
  • critical for businesses to be flexible and responsive, meaning they seek to reduce employment costs
  • unions less powerful, meaning governement and EU take this role instead
  • companies are using more part time and contract staff
  • social customer; social media revolutionising the way we deal with customers
  • the use of big data for research requiring more complex ways of storage, handling and processing
  • the growth of knowledge based industries means employees have become more valuable assets
  • the trend to flatten organisations, decentralise decision making and empower employees
  • no jobs for life
  • employees demand great job satisfaction, higher rewards, more personal recognition and flexible working
  • societal changes;
    • greater freedom of expression and thought,
    • improved access to personal information held by governments and organisations,
    • less respect for authority
    • attitudes to change, direction and reorganisation has shifted and needs to be taken into account
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2
Q

What are typical contradictions we can see in a strategic sense?

A

Global versus local -
globalisation = largest markets ever known yet more people want to buy local; global isn’t necessarily the biggest; scarity of products, brand petutation and distribution channels make the difference

  • Centralised versus decentralised organisation strutures : finance often central but prices and discounts are set locally
  • Hard and soft management : strategy is a ‘hard’ discipline ; yet the creativity and change skills that make it work are the ‘soft’ skills
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3
Q

What is strategy?

A
  • business goal or mission
  • timeframe: short, medium and long-term
  • organisation resources utilisation: finance, skills, assets, technical competence
  • environment: the organisation works in

“What’s happening out there, and how do we fit into and maximise return from it?”

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4
Q

Whats levels does strategy sit at?

A
  • Corporate
  • Business Unit
  • Operational
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5
Q

How are strategies created?

A
  • Powerful Individual (entrepreneurial)
  • Decentralised, empowered organisations (intrapraneurial)
  • Formal planning process
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6
Q

What is strategic power?

A
  • Dependency (controls resources)
  • Financial resources (owns funds)
  • Position (organisation structure)
  • Uniqueness (no other part of the organisation can do this)
  • Uncertainty (unpredicatable effects of the environment give groups ‘power’ to protect people)
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7
Q

What technique would you use to analyse the external environment?

A

PESTLE

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8
Q

Give me an example of a political influence

A
  • trade regulations and tariffs,

- social welfare policies

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9
Q

What economic influences should you take into account?

A
  • interest rates
  • inflation
  • unemployment
  • disposable income
  • business cycles
  • money supply
  • availability and cost of energy
  • internationalisation of business
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10
Q

Give me an example of a socio-cultural change

A
  • demographics (ageing population in Europe)
  • social mobility (enlarged Europe enabling freer movement of labour)
  • lifestyle changes (desire to retire earlier, changes in views about work/life balance)
  • concern for the environment
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11
Q

What Technological issues should you take into account?

A
  • government spending on research
  • focus on technology for innovation and invention
  • fast pace of technological change
  • creation of technology-enabled industries
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12
Q

Give me an example of a legal issue

A
  • legislation about trade practices and competition
  • environmental-protection legislation (recycling and wast-disposal)
  • employment law (employjment protection and discriminination)
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13
Q

What Environmental issues should you take into account?

A
  • global warming and climate change
  • animal welfare
  • waste, such as unnecessary packaging
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14
Q

What part of PESTLE affects your organisation, and how?

A
  • Economic - higher unemployment in Government sector plus less disposable income in population affecting purchase of membership
  • Technological - social media leading to a new type of customer, affecting the way we do business with customers. A PULL approach needs to be adopted, researching what customers really want and adapting our business model to deliver it
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15
Q

How would you examine the competition your organisation faces?

A

Porters Five Forces

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16
Q

What is Porters Five Forces?

A

Analysis of the:

  • threat of NEW ENTRANTS
  • threat of people usign SUBSTITUE PRODUCTS or services
  • bargaining power of BUYERS
  • barganing power of SUPPLIERS

To show the competitive battleground the business is performing in

17
Q

What increases the threat of new entrants?

A
  • product differentation (little differentation in products or services)
  • economies of scale (low invesment required)
  • barriers to entry are low (globalistation and deregulation)
  • Low capital investment required
  • Distribution channels are easily accessible
  • No new or specific technology or patentened process required
18
Q

What increases the threat from substitue products?

A
  • product substitution from new technologies is more convenient (buying from mobile device)
  • the customer feels they can ‘do without it’
  • the need for the product/service is replaced by a different need
19
Q

When would supplier power limit the opportunity for cost reduction?

A
  • costs of switching to one supplier to another are high
  • concentration of suppliers, and suppliers are bigger than the many customers they supply
  • supplier brand is powerful (Intel Inside)
  • customers are fragmented
20
Q

When would the barganing power of buyers be high?

A
  • alternative sources of supply are available and easy to find
  • switching costs are low
  • cost of product or service is high
  • small concentration of buyers and many small organisations in the supplying industry (e.g. supply to food to supermarkets)
21
Q

What is the ‘sixth force’ of Porters Five Forces?

A

Complementors

  • companies or entities that sell or offer goods or services that are compatible with, or complementary to, the goods or services produced and sold in a given industry.
  • e.g. hotdog and the hotdog bun. A normal consumer prefers to eat a hotdog in a hotdog bun.
22
Q

What technique would you use to analyse the internal environment?

A

MOST

23
Q

What is MOST?

A

Mission - Intention
Objectives - Goals
Strategy - Approach
Tactics - Details means by which the strategy will be implemented

24
Q

What are the 5 key areas to examine in strategy analysis?

A

Tangible resources

 1) physical (buildings, etc)
 2) financial
 3) human

Intangible resources

4) know-how
5) reputation
25
Q

What technique would you use to analyse your product portfolio?

A

The Boston Box

26
Q

What is the Boston Box?

A

Analyses MARKET GROWTH and MARKET SHARE to dietnfiy products that are profitable, unprofitable, consistent earners or problematic.

Categories as STARS (get the gold), COW (gets milked), DOGS (get buried), WILD CATS (examined until they behave or join the dogs)

27
Q

What technique would you use to analyse the external and internal environments?

A

SWOT

28
Q

What is SWOT?

A

A summary audit of the key Strengths, Weakenesses, Opportunties and Threats a business faces.

29
Q

What part of the SWOT looks at the internal environment?

A

Strengths and Weaknesses

30
Q

What part of the SWOT looks at the external environment?

A

Opportunities and Threats

31
Q

What is a common error when using SWOT?

A

It is often used as the first analytical tool before enough preparatory analysis has been done.

Business analysis (16 decks)

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